Stock Market Today: Jobs Data Delivers Blow to Stocks

The September jobs report confirmed the economy has more slowing to do before the Fed can stop hiking rates.

boxer with red glove on
(Image credit: Getty Images)

Stocks finished the week far from where they started as Friday's jobs data all but confirmed that the Federal Reserve still has a long way to go to slow the economy.

Earlier today, data from the Labor Department showed the U.S. added 263,000 jobs in September. While this marked a 17-month low in terms of the number of jobs added, it was still higher than economists were expecting. What's more, the unemployment rate dipped to a 50-year low of 3.5%.

Wall Street's top minds were quick to weigh in on the implications of the September jobs report, including Rick Rieder, BlackRock's chief investment officer of global fixed income. "The Fed has made it clear that to achieve an inflation reduction from today's excessively high, and stubbornly sticky, levels of inflation; that economic and employment demand will probably have to decline," Rieder says. "That was not the case yet with today's nonfarm payroll data printing at 263,000 jobs gained, and with service sector employment in particular showing strength, it still doesn't seem anywhere close enough to where the Fed can take its foot off the tightening brake."

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And that last point –- the one that suggests the Fed will continue to hike rates – is what sparked a major selloff in stocks today. The Dow Jones Industrial Average fell 2.1% to 29,296, the S&P 500 Index shed 2.8% to 3,639, and the Nasdaq Composite gave back 3.8% to 10,652. Still, all three major market indexes were higher on a weekly basis thanks to the monster gains they scored Monday and Tuesday.

price chart for Dow, S&P 500 and Nasdaq on 10722

(Image credit: YCharts)

 

Other news in the stock market today:

  • The small-cap Russell 2000 spiraled 2.9% to 1,702.
  • U.S. crude futures skyrocketed 4.7% to $92.64 per barrel, bringing their weekly gain to 16.5% thanks to the decision by OPEC+ to cut oil production
  • Gold futures fell 0.7% to $1,709.30 an ounce.
  • Bitcoin fell 2.7% to 19,463.71 (to $20,012.81). (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)

A Positive Catalyst for Pot Stocks

Similar to the broader equities market, weed stocks went on a roller-coaster ride this week amid an onslaught of headlines. Most notable among this week's cannabis news was Thursday's move by President Joe Biden to pardon thousands of individuals who had been convicted at the federal level for "simple marijuana possession." But perhaps more importantly, Biden said he has directed the attorney general as well as the secretary of Health and Human Services to review how marijuana is classified under the federal law. 

"While the president cannot in fact deschedule/reschedule cannabis unilaterally with an executive order, he can order executive agencies to consider doing so," says Jefferies analyst Owen Bennett. And this, Bennett adds, creates "a path to federal rescheduling without congressional action." 

For investors, a rescheduling of marijuana from its current Schedule 1 status could be a positive catalyst for pot stocks. Here, we take a closer look at three such names that could climb on the potential for federal policy changes down the road.

Karee Venema
Contributing Editor, Kiplinger.com

With over a decade of experience writing about the stock market, Karee Venema is an investing editor and options expert at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at Schaeffer's Investment Research. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.